In recent years, injection of olfactory ensheathing cells (ECs) into the spinal cord has been used as an experimental strategy to promote regeneration of injured axons. In this study, we have compared the effects of transplanting encapsulated ECs with those injected directly into the spinal cord. The dorsal columns of adult rats were cut at T 8-9 and rats in experimental groups received either EC-filled porous polymer capsules or culture medium (CM)-filled capsules with ECs injected at the injury site. Control rats were in three groups: (1) uninjured, (2) lesion with transplantation of CM-filled capsules and (3) lesion with transplantation of CM-filled capsules and injections of CM. Three weeks after injury, Fluororuby was injected into the hindlimb motor and somatosensory cortex to label corticospinal neurons. Observations indicated that there were a few regenerating fibres, up to 10, in the EC-treated groups. In rats that received encapsulated ECs, regenerating fibres were present in close association with the capsule. Rats that received EC injections demonstrated a significant increase in the number of collateral branches from the intact ventral corticospinal tract (vCST) compared with the corresponding control, CM-injected group (P = 0.003), while a trend for increased collateral branches was observed in rats that received encapsulated ECs (P = 0.07).